Evaluation of the Effectiveness of Pusat Pembinaan Profesi Keuangan Supervision of Cpas and Public Accounting Firms

Abstract

This research aims to evaluate the effectiveness of the supervision performed by Pusat Pembinaan Profesi Keuangan (PPPK) over certified public accountants (CPAs) and public accounting firms (firms) in order to determine whether PPPK’s supervision guidelines is sufficient compared with guidelines developed by Public Company Accounting Oversight Board (PCAOB) and Accounting and Corporate Regulatory Authority (ACRA). This research is motivated by reports on CPA misconduct regarding incomplete independent auditor’s reports where working papers are not provided as well as increased incidences of CPA and firm disobedience regarding regulations, legislation, and professional standards, even though they are supervised by PPPK, who acts as CPA regulator. A qualitative descriptive method is implemented through document observation, interviews, and a literature review. In general, the PPPK’s supervision over CPAs and firms can be considered effective. However, this supervision still requires improvement and implementation of inspection guidelines, including consideration of CPAs’ and firms’ risk analysis through inspection results and improvement of action plan implementation for follow-up and monitoring. The PPPK’s inspection guidelines are sufficient when compared with those of PCAOB and ACRA. This research also finds that a lack of inspection personnel leads to overload in the inspection of CPAs and firms. Keywords—effectiveness; inspection; Pusat Pembinaan Profesi Keuangan